X

College & Career Training in Alaska

01Sep

One Big Reason to Make Loan Payments In School: Why pay when you don’t have to? To save money!

If loans are part of your plan for college or career training, the first way to save is to do your research and pick the best loan. But there’s another secret to big savings: payments in school.

Some loans require payments while you’re in school – others offer in-school deferments, meaning you can wait until after you stop attending to start repayment. So why make payments if you don’t have to? To save money, of course!

If you have subsidized federal loans, in-school interest is paid by the federal government, but making small payments every month – perhaps $25 or $50 – reduces your balance, meaning lower required payments after you leave school, and a lower overall cost.

If you have unsubsidized loans, optional in-school payments pay off even more: Interest accrues while you’re in school – meaning that by the time you need to start repayment, the loan balance is already higher than it was when you took out the loan. Payments in school, even if only for the interest accruing, keep that balance lower.

Other benefits to in-school payments? You’re developing good repayment habits, which can make it easier to transition to repayment, and help your credit profile. And, some lenders (including the State of Alaska) offer additional perks, such as an interest rate reduction if you sign up for automatic payments while in-school.

Want to learn about other ways to save after you’ve borrowed? Check out our blog post on refinance.

About the Author

Tyler Eggen

Tyler Eggen

Tyler is Alaskan born and educated, with over a decade of experience in higher education & student affairs.  When he is not serving the next generation of postsecondary education students, he enjoys spending time outdoors while hunting and fishing.

Related

Apply Now Alaska - The Alaskan Chapter of American Application Campaign

Apply Now Alaska - The Alaskan Chapter of American Application Campaign

Apply Now Alaska is an Alaskan Chapter of the American College Application Campaign – a nationwide ...

Read More >
Reminder: Additional COVID-19 Relief Options for Alaska Student Loan Borrowers

Reminder: Additional COVID-19 Relief Options for Alaska Student Loan Borrowers

In this unprecedented environment, one of the primary concerns for the Alaska Commission on Postseco...

Read More >
What's Next? Preparing Now for the Fall Semester of College/Training

What's Next? Preparing Now for the Fall Semester of College/Training

As you enjoy the final weeks of summer, make sure to prepare for your transition to college or train...

Read More >
Cost of Attendance, Online Classes, Living with Parents, and Changing Plans

Cost of Attendance, Online Classes, Living with Parents, and Changing Plans

Still thinking of continuing your education online or virtually? Something to think about is your C...

Read More >
What College Graduates Wish They Knew Before Starting College

What College Graduates Wish They Knew Before Starting College

We asked several college graduates what they wish they knew before going to college and they said th...

Read More >
Saving Now for College Pays Later: 529 College Saving Plans

Saving Now for College Pays Later: 529 College Saving Plans

It’s no secret that going to college today costs more money than it did 10 years ago. If you’re a...

Read More >